Starbucks clears college degree path for employees

FILE - In this Friday, April 27, 2012 file photo, Starbucks barista Linsey Pringle prepares a cup of coffee at a Starbucks Corp. store in Seattle. Starbucks on Monday, June 16, 2014 announced a new partnership with Arizona State University to make online degrees available to its 135,000 U.S. employees who work at least 20 hours a week. (AP Photo/Ted S. Warren, File)

In this Saturday, May 31, 2014 photo, the Starbucks logo is seen at one of the company's coffee shops in downtown Chicago. Starbucks is announcing a new program to help its baristas earn an online degree. The company is partnering with Arizona State University to make the program available to 135,000 U.S. employees who work at least 20 hours a week. They will be able to choose from a number of educational programs. (AP Photo/Gene J. Puskar)

NEW YORK (AP) — Starbucks is giving its baristas a bargain on an online college education.

The coffee chain is partnering with Arizona State University to make an undergraduate degree available at a steep discount to 135,000 U.S. employees who work at least 20 hours a week.

It’s an unusual benefit in an industry where workers earn low wages, don’t have much job security and are accustomed to barely scraping by, often by holding down more than one job. The program underlines the stark disparities in advancement opportunities among the rich and poor. It also highlights how traditional college educations are a near financial impossibility for many.

At an event in New York City on Monday, CEO Howard Schultz recounted growing up in federally subsidized housing and said the issue was personal for him because he was the first one in his family to attend college.

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U.S. Education Secretary Arne Duncan joined him on stage to tell the crowd of about 340 Starbucks workers and their family members that given the disappearance of many blue-collar jobs that pay decently, education has become increasingly crucial to succeed. Duncan urged workers to take advantage of the program and show other companies why they should offer similar benefits.

“Think of the example you can set for the rest of the nation,” Duncan said. “If you guys can do this well ... you’re going to change the trajectory of the entire country.”

Starbucks Corp. said it doesn’t know how many workers will apply or how much the program will cost over time.

One worker from Los Angeles, Michael Bojorquez Echeverria, said he works up to 75 hours a week, including at another job, and attends community college at no cost. But he plans to apply for the Starbucks program because he thinks it will offer greater financial security.

He said the only thing he suspects he will miss is the socializing that comes with attending school in person. “But hey, if they’re going to be paying my fees, I can manage,” he said.

Workers who take advantage of the program at Starbucks will have the freedom to pick from 40 educational programs. And they won’t be required to stay with the company in exchange for their education.

As with most matters involving financial aid, the terms of the Starbucks program are complicated and would vary depending on the worker’s situation. For the freshman and sophomore years, students would pay a greatly reduced tuition after factoring in a scholarship from Starbucks and ASU and financial aid, such as Pell grants. For the junior and senior years, Starbucks would reimburse any money that workers pay out of pocket. That means employees who already have two years of college under their belts would be able to finish school at no cost.

Online tuition at ASU can vary but is about $10,000 a year, similar to the tuition for its traditional program. Most Starbucks workers would likely qualify for a Pell grant, which can be as high as $5,730 a year. Starbucks did not disclose the terms of its financial agreement with ASU, and how much money it is contributing to the scholarship being provided by the two organizations.

There have been some other efforts at offering low-wage workers education benefits. In 2010, Wal-Mart Stores Inc. started offering partial tuition grants for workers at American Public University, a for-profit, online school.

Starbucks also already has program that reimburses workers for up to $1,000 a year at City University of Seattle or at Strayer University. The company said that will be phased out by 2015 in favor of the new program, which is far more generous.

Starbucks workers would have to meet the same admission standards as other students at ASU. Only workers at Starbucks’ 8,200 company-operated stores would be eligible. Another 4,500 Starbucks locations are operated by franchisees. The program is also available to Starbucks’ other chains, including Teavana tea shops and Seattle’s Best.